Marathon has entered into a definitive agreement with Star Energy Group, a wholly owned subsidiary of Petroliam Nasional Berhad (Petronas), under which Star Energy Group will purchase Marathon's wholly owned subsidiary, Marathon Oil Ireland Limited for $180 million, excluding any purchase price adjustments at closing.
The companies expect to close the transaction, subject to completion of the necessary administrative processes with Irish authorities, early in the first quarter of 2009. This agreement does not include Marathon's 18.5 percent interest in the Corrib natural gas development.
"With the sale of Marathon Oil Ireland Limited, our global asset portfolio review and the resulting sale of non-core assets has generated nearly $1.2 billion in cash pretax. We anticipate that this program will generate $2 to 4 billion in cash pretax by mid-year 2009," said David E. Roberts, Jr., Marathon executive vice president, Upstream. "The objective of this global review is to ensure our assets are fully aligned with our business strategy and that we are well positioned to continue generating sustainable value growth."
Marathon Oil Ireland Limited's assets include a 100 percent operated interest in the Kinsale Head Area comprising Kinsale Head, South West Kinsale and the Ballycotton gas fields, as well as an 86.5 percent interest in the gas producing Seven Heads field which is tied back to Kinsale, and a 100 percent interest in the Company's gas storage business with current capacity of 7 billion cubic feet. Current net production from these operations is approximately 36 million cubic feet of natural gas per day.
Marathon's total net risked resource associated with these assets as of year-end 2007 was 62 billion cubic feet (bcf) of which 46.2 bcf (7.7 million barrels of oil equivalent) were net proved reserves. As part of this transaction, Star Energy will retain the 61 Marathon Oil Ireland Limited employees in Ireland.
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